thank you for being with us. >> greta: tonight, the head of the central intelligence agency, david petraeus, made himself blackmail material. what did the white house know? and when can they know it? petraeus resigned after admitting to cheating on his wife. raising more questions than answers. why now? days before he was set to testify about four dead americans in libya. >> the terror attack, benghazi, has put a lot of pressure on this white house. and a lot of pressure on senior intelligence officials, like general david petraeus. thls a complete surprise, though. >> the timing is just too perfect for the obama administration. just as the administration claimed that there was purely coincidence that our benghazi conflict attack was on the anniversary of september 11. now it's purely coincidence that this extra-marital affair

surfaces right after the election -- want before, but right after, but before the intelligence chief goes to capitol hill to get grilled. >> we had heard he may have resigned for personal reasons. one of those reasons was the possibility of an extra-marital affair. we are confirmed it because a letter has been submitted by david petraeus himself. >> i just got off the phone with someone who talked with general petraeus, just in the past few moments. and the message was... a couple of points. one was, tell the truth. it was my request. the white house did not pressure me to do this. othing at all.ng to do with this was my request. this has nothing to do with it. i want to testify about benghazi. there was nothing to do with the white house pressuring me to leave this job. >> this reads like someone you would not even imagine, with a

plot like this, five days before the hearing. it does legitimately raise eyebrows. >> greta: do you think it's a coincidence? cia director david petraeus resigning days before he was supposed to testify about benghazi on capitol hill. cath ridge herridge is here. tell us the facts we have right now. >> the chain of events, it set into motion on thursday. fox was told that the cia director had a very important meeting at a cia headquarter, people were coming in from out of town. a couple of hours before, it was cancelled abruptly. we know that on thursday, he went to the white house and talked specifically to the president about resigning from his position, for personal reasons. then on friday, that resignation was accepted by the president. so it's really been a chain of events over the last 48 hours. >> greta: do we have any information whether or not the

white house or anyone else learned about this before wrftr yesterday -- wednesday? >> the public statement is that they learned about it wednesday. but hia conversation with someone who is very familiar with the notification process to capitol hill. and what we were told is that once someone of the director's stature comes even within the scope of an fbi investigation, not the subject, but the scope, there has to be immediate briefings to the ranking members and the chairman of the house and senate intelligence committees. we are not clear, at least tonight, that that happened. >> greta: all right. when did this affair begin? when the affair is still secret from the time it began until today is a time when someone is potentially blackmail material. do we know when this began -- or not the point it ended, but when it's gone to the public domain. >> we don't have specific information on when the affair began. once the story broke, the cia director was resooning, within the first half hour, several people here at fox got multiple

phone call, pointing to this author, paula broadwell and to the thyme frame in afghanistan, when the biography was being written and cia director petraeus was the eye staff commander. we're talking about 2010, 2011, before he took the position at the cia. >> greta: i take it when you go to the cia, especially head of the central intelligence agency, there is a security check or you fill out forms under oath, saying you are not blackmail material. you have nothing that is a problem for national security. any information about that? >> cia told fox this evening that they're cpm. not the fbi. but they are cpm for the background check and also for the security clearance check. this is very significant because, again, what that tells us in our reporting is that this investigation by the fbi was separate. it was not in connection to that original clearance investigation or the background investigation.

so something happened, within the last 14 months to trig ter. >> greta: let me tell you, look at a composite of stuff i have put together. september 11, the ash tack. within 24 hour, according to the associated press, cia station chief in libya reports, it is evidence of being carried out by militant, cia within 24 hours on the grown, says it's a video. september 13, thursday, representatives of the fbi and national counter terrorism center go to capitol hill and say evidence supports that it was al qaeda or al qaeda-affiliated attack. they have intercepts claiming responsibility by a particular group. the next day, september 14, cia director petraeus goes to capitol hill and makes the report and raises the video and protest, in direct conflict to what the fbi and ntct said and the station chief said in libya, on the day of the attack. >> these are critical events in

the first week of september because this sets out the conflict of lawmakers between what director petraeus was saying as the cause of benghazi, what fox news was told by lawmakers is that he was very much wedded to the narrative of the administration of a flash mob or connected to the video. that was in direct conflict with what the fbi was stating to lawmakers. and this was the first time in our reporting at fox news that we have really heard lawmakers express anger and frustration with director petraeus because this is someone who in many respect, until this point, had been untouchable. >> greta: he is supposed to testify next week. high is no longer the director of the cia. but there are the hearings on benghazi. they could subpoena him as a civilian. >> the cia told fox, he's gone. he is out -- the movers are coming to get his stuff now. he is out. and mike morale rel, the acting director will testify. fox was told on the hill that they have a couple of options.

they can request david petraeus to testify as a civilian. they can subpoena him. if he does not wish to come. they would anticipate that he may lawyer up in this situation, giving -- given the circumstances. but we heard from congressman king that he feels it is essential that the cia director testify about these events because he was the operations guy, gret a. he was the nuts and bolts. the director of national intelligence is the manager, not the nuts-and-bolts guy here. >> greta: thank you. former new york city mayor rudy guiliani smelled a coverup from day number 1. what does he think now? good evening, sir. >> good evening, greta. >> greta: sir, you have any thoughts about today's developments? >> well, i do think the plot thickens. it becomes more and more... ridiculous, what's going on here. we find out there was a drone attack on november 1. that was clearly suppressed by

the obama administration. for five, six days. now, this has to have been suppressed also. they department just find out about today or yesterday. the fbi is also investigating. general petraeus to me -- i feel heartbroken about this -- is and always will be a truly exception american hero. he is like eisenhower. eisenhower had an affair also and he didn't resign. the idea that david petraeus can be blackmailed because he has a woman friend is totally ridiculous. this man -- this man has put his life at risk for his country over and over again. somebody's going to come to him and say, you better give us secrets or i'm going to tell your wife you have a girlfriend. at some pointo have to grow up. half our presidents would have had to resign over this. >> greta: let me play devil's advocate, if he is vulnerable enough to want to hide something, the reason why you tell all in these investigations, when you get the

job, you want to disclose them is so that you don't become material for blackmail. >> right. >> greta: there is also the added problem, that as a man of his great stature tdoes send a message to others in the military about -- about honor, trust and discipline, which is so important -- >> you know -- but, greta, this has been going on for 2,000 years. and under this standard, we probably would have lost half of our generals and half our presidents. >> greta: that may very well be i. eisenhower would have been gone because of kate sommersby, right before the battle of d-day eisenhower would have had to resign. somehow, we have to grow up. >> greta: explain to me, i think maybe he's the one that ought to grow up, i say that with some level of sarcasm, growing up. plain to me, within 24 hours of the attack on 9/11, the cia station chief in libya says it

was carried out by militant, nothing about a video. on two days -- the next day, september 13, representatives of the fbi and national counter terrorism center go to capitol scmil they say that it looks like it was al qaeda, the evidence supports al qaeda or an al qaeda-affiliated attack, there were intercepts of a group claiming responsibility. the next day, september 14, now it's for the first time, at least as far as we can figure out on the timeline, cia director petraeus who talks about, in this briefing, about a video and a group and clear conflict what his own cia station chief said within 24 hours. what happened? >> i think this is the reason for the resignation. i don't think it's over the affair, the fbi finding the affair. and in fact, if they did find it, why didn't we know about this a week ago or two weeks ago. i think they must have known about this affair, two, three, four weeks ago.

just like the drone. they knew about the drone on november 1. how they hid that -- i mean, this is an administration that is practicing now serial deception. i mean, it's almost like, you know, when first you practice to deceive, you just can't stop. you spin a web of lies. it started from the first moment that this happened. now it's getting more and more -- more and more complicate ed irk i assume you can understand our extreme cureiosity here i. absolutely. >> greta: fox has been here since it happened. fox was excluded -- fox was the only news organization excluded from a briefing by the cia. i mean, have you a cia director, who is not -- former director now, who was not answering questions about benghazi. he is not going to be testifying in a hearing. fox is excluded from a briefing. the timing of the resignation is unusual. you know, so you can understand our extreme -- >> of course. the frustration is totally justified. and it's in the national interest. now we are going to have a

hearing next week and the man who knows the fac, david petraeus -- he's the only man who can really tell what did you say the cia knew, what they did, why they did it, how they did it -- he's not going to testify. this is a very convenient way to get the administration out of a very, very difficult situation. but -- this is inevitable. this is like watergate. this is inevitable. this is going to come out. it may take a month or five months, but this is all going to come out. every new coverup they do make its much, much worse. >> greta: there is nothing to prevent him from testifying, except for he can't testified to classified information. maybe he will. thank you, sir. >> take care. >> greta: of course, what about the timing? general petraeus admits to cheating on his wife before he is supposed to testify about libya. now the big question, will we hear what general petraeus does know about benghazi? former senior adviser to president ronald reagan, pat buchanan is is here.

>> he is a great general, very well respected. this is very problematic, the timing of it and everything. you talked about him being blackmail material. if he was blackmail material, then he became plaque mail material from the day he went into the central intelligence agency -- >> greta: as a general. if you are harboring anything like that, through the whole period, it gets more serious after that. >> but the cia, we learned from katherine, did what the fbi usually does, a full field investigation of someone to make sure they don't have problems like that. how could any full field investigation of general petraeus in afghanistan miss this if it had happend? when did people find this out? what it sounds like is that general petraeus was blackmail material from the day he entered the cia, until the day he left it. the mayor had a good point. why did he suddenly leave now? did he become a security risk now? or was it bk because the scandal

was going to break or because it was the benghazi that is coming up? here's general petraeus' problem, you have alluded to, september 14. september 11, his own safe house in benghazi, with a couple of hero seals there, who went over also to the compound, they were killed in a fire fight on and off that lasted 7 hours. are you telling me that the head of the cia did not know 3 days later that this was a fire fight and an al qaeda attack. and he thought it was a are test over a video? >> greta: that's what he said -- we don't know if he thought that. >> that's what he said. that's why the congressmen are so angry, i think, that they were deliberately misled. now i get into surmise. it sounds to me like, when susan rice and the others said we got the intelligence, they were being fed the intelligence by general petraeus's cia. >> greta: what would be the

motive? if general petraeus is saying on the 14th, if he is on friday, the 14th of september, telling capitol hill, it's a video. but within 24 hours of the event, back-dating to september 12, his own station chief, it is reported by the associated press -- not fox, but kim dozier, the cia station chief in libya says it's evidence it was carried out by militant, no mention of a mob upset about a video. what happened between the 12th and the 14th? >> general petraeus was the one that went up and told the congress this t. look like the central intelligence agency generally and general petraeus specifically moved this story. i would not be surprised if susan rice testified and the white house guys testify that general petraeus was the one giving them this intelligence. there is another issue here. i have had to undergo full-field fbi investigation into the nixon

white house. they went to your college and everything else. that full field investigation, results went straight to the white house chief of staff. if the cia investigated its own new director and did not discover this affair in afghanistan, they ought to all be fired. if they did discover this, who did they send the report to? did the white house know? did they say, look, he had a problem over this. he had an affair, don't worry about it, it's over? that's what it sounds like to me. >> greta: he was supposed to report it immediately to the intel committee with such a high rank in national security. >> i mean -- that raises the question -- did the cia investigation interest petraeus miss this affair? because you have an affair like that, a general in bagram or somewhere -- that's all over the place. if you had an affair with an eob, it's all over the building. >> greta: i suspect it was talked about over there. i don't think it was -- probably, usually, they are not a big secret.

>> they are not a big secret. exactly. my guess is that the people who got the information said, okay, he had knowa affair. eisenhower had one, macarthur had one -- >> greta: that's what everyone keeps saying. i think we have gone to a different point -- >> all right. let me -- >> greta: everyone was upset when the secret service had a prostitute before the president arrived. i have a list of senator who is say they were scandalized by the security of the president of the united states in columbus. >> general patton had a number of affairs. are you going to fire the general? >> greta: no -- >> what i am saying -- look, look -- i can understand how people would say, this is done and this is over. all right? that raises -- that's behind us. why then did general petraeus leave now? that's -- i mean, why didn't he just say, it came out, it was going to come out, okay, it happened, it was a language time ago, it's over. most press people say, it's over. that's it. >> greta: i am not concerned about the affair, i am concerned

about the discrepancies in the stories. i am going to take the last word because we have to go. actually, pat, stay with us because i want to talk to you later. we have much more to talk about. what is congress going to do to get answers about benghazi? congressman tray gowdy is here, next. we are getting closer to the doom of the fiscal cliff. and today, president obama and speaker john boehner drawing different lines in the sand. will they break the stalemate? and if they don't -- that's coming up.

>> greta: late today, david petraeus abruptly resigning after admitting to an extra-marital affair with his biographer. that's bad. but it gets worse. the resignation just days before general petraeus was set to testify at congressional hearings. coincidence? >> good evening, how are you? >> greta: i'm very well. congress pan, the affair, i mean, for the most part, i am trying to separate this out. it is a matter for general petraeus and his wife. but there is -- there is some parts of it that do have an implication. one is whether or not it's a security breach and that it should have been picked up and turned over to the house intel

commits and whether or not that could be used as blackmail against him. your thought, sir? >> well, even someone as lowly as an assistant u.s. attorney has to undergo a background check with very invasive questions and you are expected to tell the truth and you are asked under penalty of perjury. so you can increase that expoinentially. i am sure they would have liked to have known that information in a timely fashion. but i will tell you this -- and i do lament the personal ramifications, but the fact he has resigned has nothing to do with whether or not he will be subpoenaed to congress. i hope we don't have to subpoena a four-star general. i hope he would come voluntarily. but if he won't, he will be subpoenaed. none of with what happened today is a defense to a subpoena.

>> greta: all right. would you agree that there is no sort of security problem, or even a blackmail problem, if for instance, his wife knew about it, and he had told the fbi or the cia, whoever conducted it, so he wasn't vulnerable to outside, someone coming in to try to influence him. would you agree to that? >> it could be. i mean, that's a very fact-intensive inquiry. it could be his wife knew, but his mother didn't or his wife knew but his kids didn't. i would suspect with men like general petraeus, where honor means something, losing your life is secondary to losing your honor. the fact that your wife knows something didn't necessarily get you off the hook in terms of losing your honor. >> greta: getting back to benghazi. is he an essential part of this inquiry? i have read a timeline of do i have trouble with the fact that -- i don't know what happened between the time the cia station chief in libya said that it was essentially a terrorism group, a terrorist or

a militant group and the time he went to capitol hill. i don't know where in the world the video came up. but do you expect he will testify and explain that? >> he's going to have to. he is either a witness in our case in chief, or he is going to be a rebuttal witness after susan price and others blame him for their failure of intelligence and failure of information. so to put it back in a courtroom, he is going to be one of our witnesses in our case in chief or we are going to wait until someone else invokes his name and he will be's rebuttal witness. but there is no way to get to the bottom of benghazi without david petraeus. while he may not be around next week because he has personal matters. the week after that, and the week after that and the week after that -- this excuse will run stale. >> greta: will the unanswered question tonight is what provoked the resignation, or what provoked? was someone going public with

it? was there a problem? or was it benghazi and he didn't want to testify? we don't know what sort of provoked the confession which resulted in the resignation. it is like, that's sort of -- that is a missing piece of information tonight. >> well, the questions are a lot better than the answers, at this point. but as your previous guest were talking, i thought about the book "crime and punishment." sometimes it's just guilt. there is no explanation better than guilt. i don't know david petraeus. i sat next to him at a dinner one time. i hardly know him. i don't know what the motivation was. we will find out. benghazi is not going anywhere, despite the fact that most of the members of the so-called mainstream media have ignored it so far, in a perverse way, the fact that we have a salacious component will mean they are gorntd cover. we are going to find out what happened to those four murdered american, one way or another. >> greta: well, i think that, at

least most of the people i talked to would really like to know, it has gotten more bizarre as the days have marched on with a different story and incomplete information and all the information will be greatly appreciated. thank you, sir. >> thank you, ma'am. >> greta: straight ahead, president obama versus the speaker of the house, john boehner, digging in their heels on avoiding the fiscal cliff. time is running out. the latest is next. another bush family member is getting ready to run for political office. which one is

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>> well, it didn't take long, talk of compromise, post postelection, turning into stalemate. john boehner and barack obama not budging as we rapidly approach the fiscal cliff. >> 2013 should be the year we begin to solve our debt through tax reform and entitlement reform. i am proposing we avert the fiscal cliff together, in a manner that insures that 2013 is finally the yirr that our government comes to grips with a major problems that are facing it. >> on tuesday night, we found out that the majority of americans agree with my approach. and that includes democrats, independents and a lot of republicans, across the country, as well as independent economists and budget experts. that is how you reduce the deficit, with a balanced approach. >> four years of the obama administration, and the economic

policies, they are clearly anti-business, anti-entrepreneur, they are anti-job creation. >> when speaker boehner and others have talked about saying that revenue can be on the table, i think that is a sign that the president appreciates that recognizes that we need to compromise here, that we need to come together and take a balanced approach. >> i want to be clear, i am not wedded to every detail of my plan. i am open to compromise. i am hope to new ideas. i am committed to solving our fiscal challenges. but i refuse accept any approach that isn't balanced. >> of course, everything washington does doesn't solve the problem. all washington does is exacerbate the problem. they create a problem. they say they are the only ones to fix it, they fix it and the problem gettings bigger. >> this is an opportunity for the president to lead. this is his moment to engage the congress on a solution that can pass both chambers. i think we both understand that

trying to find a way to avert the fiscalg cliff is important for our country, joining us, former adviser to president ronald reagan, pat buchanan. it is really too bad that this is so serious for so many americans and the whole country. watch the politicians try to work this out. >> well, this is -- this is james dean and buzz and rebel without a cause and they are headed for the cliff in the stolen cars, first one that jumps out is the chicken and the other fella went over the cliff. but i think they are going to get a deal. i think bane ercannot go home to his people having raised tax rates. i think boehner and mitch mcconnell will say no increase in tax rate, 35% is it. i think the president will concede on that point. i think bainer and mcconnell will then accept the idea of cutting culling or capping the deductions each individual and the higher brackets can take,

set a top limit on the deductions they can take and that will increase the revenue flow into the federal government. at the same time, the two congressmen, republicans, preserve the rates argument. they won't make all of their folks happy, but i think that's the deal in the works. >> greta: a couple of problems. number 1 is, the fact that -- today at least, i am always stunned when -- with the exception of senator tom coburn, i barely hear anyone talking about the tremendous amount of waste and fraud. we put up the example of the guy in the bathtub with the wine glass, which is a tiny, tiny bit, but it's representative of the mind-set here. no waste and frawpd fraud. they won't raise the tax rates, but when you do put caps on deductions, you are raising the effective rate. i mean, i guess they get -- i mean, i don't -- that's fineful but it's like, don't tell me you are not raising the tax rates when you do that -- that you are not raising taxes. >> they are raising tax revenue,

but the rates would stay the same. the deductions would simply go. it's more than semantics. let's take mitt romney's tax return. 20% he gave to charity. if you cap the detoukses of 10% of income, a lot of charitable deductions would not be taxable and he would -- >> greta: or not -- >> the actual rate would go up. >> greta: maybe some people would be discouraged. cutting the deductions, i would hope that for people, for the mortgage deduction is so important for so many americans, i would assume that -- this would be -- the wealthy people. >> the realtors would go bananas, people in the housing industry because the mortgage interest deduction is a real incent testify buy houses and rental properties. >> greta: and savings. >> a love us older folks who have paid off our mortgages, it doesn't affect us at all. but young people, who got high

mornings -- >> greta: tell affect them. >> it really affects them. but interest rate deduction, pose you capped it at $24,000 a person per year. what is that? $2,000 a month or something? then you take care of all of your middle-class homeowners and you take the folks in the $3, $4, $5 million houses who have leveraged them and they would get hammered urk i like simpson-bowles, i like the members on the committee. they work really hard t. didn't make everybody happy. but it seemed like it was at least doing something and making big inroads. >> i think the real problem will be in the piece you mentioned early earlier, the spending side. the democratic party, what is it in business for? its whole pride and joy, social security, medicare, medicaid, head start, food stamp, school lunches, school loans. all of these programs. harry reid and those folks coming to washington, are they

going to cut and chop that whole area? republicans are not going to want cuts in defense. so are they going to get that piece of it done? that's where i have my real doubts. the second one is, if you, as you indicated, the tacks taken out of people's income, at the beginning of the year, if they go along with a deal like that, what does that do to an economy, which is moving along at 1 1/2 or 2 ?rs. nobody suggests you raise tax when is the economy's chugging along at 1 or 2%. what is the philosophy behind this, other than it's neo-marxist, let's go after the rich guys and hammer them. >> greta: pat, thank you. always nice to see you. >> coming up, republican and democratic lawmakers say they didn't see it coming. so many question, why the general petraeus resignation now? is it benghazi investigation, in any way related? our panel is here to talk about. that and then two former presidents and a former

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u.d are we going to see another bush on the ballot in 2014? george p. bush, the son of former governor jeb bush, nephew of george w. bush and the grandson of george w.h. bush. he is a fort worth attorney special a rising star among hispanic conservatives. he didn't list which office he plans to seek. but republicans across the state, cheevering that another bush is coming to texas ballots. last august, george p. bush was promoted to deputy finance chairman of the texas republican party. what do you think he is planning? which office do you think he's

eyeing? we are back in 2 minutes.

>> live from america's news headquarters, i'm marianne rafferty. president obama plans to visit new york city to review the recovery efforts efforts from sr storm sandy. he is expected to meet with local officials and families affected by the storm. more than 400,000 customers are still without power in new york and new jersey. the storm, which hit the region on october 29, is blamed for at least 100 deaths. chrysler recalling nearly 1 million jeeps worldwide due to an airbag problem, for grand cherokee and liberty models in the u.s. federal investigators saying a bad part can inadvertently set off the airbags.

it has caused dozens of injuries, but no crashes. i'm marianne rafferty. now back to "on the record." for your latest headline, log on to foxnews.com. back to record r. >> cia director, petraeus abruptly resigned, for personal reasons, cheating on his wife. but the timing is raising eyebrows. in days he is supposed to go to capitol hill to testify on benghazi. joining me is bob cusack and steve hayez and byron york. byron... go aheadanism the fbi investigating the cia director in the heat of a presidential campaign and the white house apparently doesn't know about it. and the-- the opposition party in congress is hot on the heels of the cia about this debauch nel libiasm i mean, it's an insane situation. and we need to know more about it. a few minutes ago, a republican who was until 2011, chairman of

the house intel committee, sent a tweet that said petraeus resignation will get worse, more here than meets the eye. i don't know if that's true, but it has to be investigated. >> greta: steve? >> well, it's interesting that the white house is saying that the president didn't know until -- until he was informed yesterday, i guess, others at the white house were told wednesday. i was told by talking to some intelligence sources that i that the fbi has been looking into this for a while -- >> greta: what's a while. >> i was told for a while. i don't have a thyme frame. but that suggests longer than two days. if that's the case, it makes you wonder, did bob mueller, the head of the fbi, know this and not report it up the chain? not tell anybody at the white house? it was interesting to me that the white house said the president didn't know. were other people know? did other people at the white house know this? i would imagine that if bob mueller knew this, other people

at the white house knew this. >> greta: he's the head of the cia. we are not talking about a lower-level job. this is a big job. >> yeah, you could be compromised. that's the concern here from the fbi's standpoint. the new york times reporting that the house and senate intel committees didn't know about it until this week, though they should be briefed on this type of thing. it's a major problem. also, i mean, he has a detail, he's the cia chief. if he was messing around, didn't the detail know about it? >> greta: unless it predated his timive that's tru. we tonight know. >> what is the role of the timing here? obviously, this was going on well before the election. have you the election going on. you have republicans -- some of whom wanted to make more political issue out of benghazi and then you had this -- potentially explosive development going on. why did we find out about it immediately after the election? want before? >> greta: how about senator dianne feinstein, in theic chair of the senate select committee on intel in she said that the

president shouldn't have accepted the resignation. >> yeah, look, i think that's crazy. first of all, the message it would send, if people knew what he was doing or had done and remained in this position, that would send a terrible message to the cia workforce. it's shocking that she would say that, given what little we know, what little we know is troubling. given the timing and the fact that it comes day after the election and days before he was scheduled to testify on benghazi, remember, he played a very controversial role. you had briefings from the folks at the pentagon from, folks at the fbi, in the days immediately preceding petraeus' briefing the intelligence committee on september 14. petraeus told a somewhat different story than the others told -- >> greta: not somewhat. it was profoundly different. the cia's station chief in libya, reported within 24 hours that it was a militant. >> petraeus in his testimony before the house intelligence committee on september 14, two

days later, said it was a video, basically, overruled his top cia official on the ground in benghazi, in telling that story. >> greta: stand by. straight ahead, the faceoff over the fiscal cliff. president obama inviting president obama inviting congressional lelele [ male announcer ] choosing a windows 8 device with help from your frid. i'm thinking aboutpgrading... finally! jonathan was fine when you were in your 20s, but he's not right for you. good-bye jonathan and his creepy little girl hands. i meant... [ male announcer ] or choosing a windows 8 device with help from the experts at staples. another way staples and hp make it easier to upgrade. make your windows 8 experience even better with hp. and this week, get $200 off the hp envy dv6 notebook. staples. that was easy.

>> president obama and speaker of the house, john boehner, both talking about a big game about compromise. but do they have a different dfgdz of compromise than the rest of us? neither is willing to budge on tax cuts, so is there any hope of avoiding the fiscal cliff? bob, where are we going? >> i don't know. we are not going to get a solution. john boehner didn't want to have any type of grand bargain. he wants to wait for the new congress to be seated. how you do a temporary punt. obama has the leverage. he won re-election. so where we go from here, i think you are going to see a lot of political games next week when congress comes back to town. potentially, we go deep into december. >> the president is holding most of the cards here, he won re-election and the republicans are absolutely terrified of going over the cliff. the tax cuts expire. the president and democrats propose a bill to restore the tax cuts to all but the top

bracket and the republicans say, no, no, no. we don't want to do that. we have to restore the tax cuts to the rich people. they don't want to be in that situation, they can't let themselves get in that situation. >> which is why, i think you saw john boehner come out pretty aggressively this week and say he's open to a compromise. the key word in his statement and the statement he made before the election was tax rates. he doesn't want to see the rates go up. >> greta: that's the washington game. you know, they are not going to raise the rates, but they get rid of deductions so the amount of tax you pay does-- the tax you pay does go up. i mean, that's -- when they play that game, i roll my eyes. >> one of them told me, mitt romney, on the campaign trail... suggested limiting deductions for higher-income earners. the dedux like mortgage interest and charitable -- >> but people don't have. >> they are going on raise tacks. >> but the rich people don't

have mornings. so it doesn't matter if you get rid -- they don't have them. their houses are paid for. so get rid of the deduction. >> people $250 do have mortgages. >> but as you go farther up the food chain, financially, and that was what i think president obama wanted to get those people to pay. >> can we point out the irony of this context isn't president obama has twice argued that raising taxes when the economy is struggling would hurt the economy, hurt any recovery. now he's saying, staking his ground and saying, i will not sign anything that doesn't include this proposal, that i have said will diagram the -- damage the economy. >> greta: wasn't the analysis, correct me if i am wrong, even if the tax increase went in, it would pay for eight days of the federal government. so woe are arguing about eight days of revenue. and no effort to restructure the government or collect waste and fraud. >> correct. he also said that, by the way, at a time when there was less --

more economic growth than there is now. the growth situation is worse than when he said hee we shouldn't raise taxes. >> he has incentive to get this done as quickly as possible. his honeymoon is only going to be so long. he wants the immigration reform done. >> greta: and the benghazi hearing this week. >> gentlemen, thank you. coming up, there is big news christmas was magical? let's get back there. celebrate the arrival of santa at bass pro shops this saturday and the unveiling of santa's wonderland. time passes. hold on to christmas.

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